Insurers Must Physically Inspect to Confirm Damage Cited by Aerial Imagery

The Pennsylvania Insurance Department (PID) has reminded insurers of their obligation to conduct a physical inspection to confirm the type and extent of damage to a roof supposedly evidenced by aerial imagery.

The regulatory agency said it has received consumer complaints regarding insurers using aerial imagery canceling or not renewing policies due to the condition of their roofs. The department said it found that the “aerial images in question often did not clearly demonstrate significant roofing degradation or damage, but merely showed discoloration, streaking, or other cosmetic issues that should not be the sole basis for canceling or nonrenewing insurance policies.”

In a bulletin, Insurance Commissioner Michael Humphreys stressed that the department “does not seek to broadly restrict the use of aerial imagery” but wants insurers to provide consumers an opportunity to challenge the results or fix any confirmed problems before their policies are canceled or not renewed.

“Some of the aerial images that we’ve seen used to take adverse actions against policyholders barely identify the structure of the home, much less the detailed condition of the roof and whether it needs to be repaired or replaced,” Humphreys said in a press release.

The department also said it has received complaints that insurers are not providing consumers with proper notice of cancellation or nonrenewal, including the specific reasons for these actions.

The aerial imagery reminder comes after the department in April issued guidance on insurers’ use of artificial intelligence (AI) based on a model by the National Association of Insurance Commissioners (NAIC). The AI notice advises insurers that their use of AI must comply with all applicable insurance laws and regulations. The guidance on AI outlines specific guidelines for governance structures, accountability, monitoring, audit protocols and training.